From the WSJ:
A forecasting gauge of home sales unexpectedly increased during December, a realtors’ group said.
The National Association of Realtors’ index for pending sales of previously owned homes increased 6.3% to 87.7 from 82.5 in November, the industry group said Tuesday.
Private analysts projected pending sales would fall 0.5% during December.
Lower prices elevated the index for pending sales, the NAR said. “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month,” said Lawrence Yun, chief economist for NAR. “The biggest gains were in areas with the biggest improvements in affordability.”
By region, the Northeast decreased 1.7% in December from November; it had gone down 14.5% since December 2007.
The number of new sales contracts on existing homes jumped a seasonally adjusted 6.3% in December as buyers took advantage of lower mortgage rates and falling prices, a real estate trade group said Tuesday.
The pending home sales index rose 6.3% in December and is now up 2.1% compared with a year earlier, the National Association of Realtors said.
The increase points to a healthy gain in existing-home sales in January and February. The index is based on signed sales contracts, which usually occur a month or two before the sale is closed, when sales are reported in the NAR’s existing home sales report.
Pending sales surged in the Midwest and South, offsetting small declines in the Northeast and West.
More Americans signed contracts to buy previously owned homes in December for the first time in four months, signaling slumping prices may be boosting demand.
The index of pending home resales climbed 6.3 percent to 87.7, the first increase since August, from a revised 82.5 in November, the National Association of Realtors said in a report today in Washington. Pending sales rose in two of four regions.
Record foreclosures are pushing down home values, making homes more affordable for those buyers able to get financing. Still, restrictive lending rules and further price declines are likely to scare away the majority of purchasers, indicating the real-estate recession will persist for a fourth year in 2009.
“Lower prices probably have attracted some buyers,” said David Sloan, a senior economist at 4Cast Inc. in New York, who projected an increase. Still, “the rise may be difficult to sustain.”
The report showed pending resales jumped 13 percent in both the South and Midwest regions. Signed purchase contracts declined 3.7 percent in the West and 1.7 percent in the Northeast.
“The biggest gains were in areas with the biggest improvements in affordability,” Lawrence Yun, the group’s chief economist, said in a statement. The NAR’s affordability index reached a record high in December.